In its first meeting on 19 September, the Securities and Exchange Board of India’s (Sebi) recently formed committee on financial and regulatory technologies (CFRT) concluded that it may be crucial to regulate bitcoin transactions to ensure that India’s public issue norms are not breached.

The Sebi panel also intends to ensure that bitcoins, its derivatives, or any other cryptocurrency are not being used as a medium for funding illegal activities and no entity is able to divert black money through the virtual currency market.

Regulators in India are yet to ascertain if these cryptocurrency exchanges, which compete with regulated payment gateways such as banks and VISA, are legal or not.

In 2009, bitcoin became the first decentralized cryptocurrency.

After linking a bank account to any mobile app or website, the cryptocurrency market enables any individual to create a cryptocurrency wallet and earn or pay any entity digitally.

Additionally, cryptocurrency enables any entity to collect money from far more than 200 investors in a financial year without requiring to follow public issue norms as under the country’s Companies Act.

Also, the gains made by an individual through transactions in cryptocurrency cannot be taxed as the real source of the gain is unknown and mostly unregulated.

Moreover, blockchain—or the technology used to power cryptocurrencies such as bitcoins—make it impossible to trace the actual use of funds and the controls employed to manage the flow of virtual money to a number of entities spread across the world.

According to coinmarketcap.com, a website offering global data on cryptocurrency, as there were at least 5,511 markets trading in 1,117 types of cryptocurrencies, including bitcoin.

The total market cap of cryptocurrencies stood at $127.61 billion globally as on Saturday, 23 September, with bitcoin alone commanding a market cap of $61.68 billion.

There are several apps and websites starting to operate bitcoin and other crypto currencies trading which is not regulated.SEBI plans to bring rules and regulations for these exchanges and apps which government can monitor bitcoin market.